Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 686: The effect of land lease on house prices

Pieter A. Gautier and Aico van Vuuren ()
Additional contact information
Pieter A. Gautier: VU University Amsterdam, Tinbergen Institute
Aico van Vuuren: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Swedem

Abstract: In Amsterdam, houses located on private land and houses with various land-lease contracts coexist. In this paper, we investigate the impact of future land-lease payments on the house price. We look at the impact on house prices of: (i) the number of years that the land lease has been paid in advance and (ii) the amount that must be paid up front. Houses on privately owned land are on average 10% more expensive. Houses with a land-lease contract that has been paid in advance are 0.41% more expensive for each year that no land lease has to be paid. We find a large and negative impact of the land-lease rent that needs to be paid on the house price.

Keywords: House prices; Land lease

JEL-codes: R30; R38

26 pages, January 2017

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